Monthly Archives: March 2018

How To Manage Personal Finances

Knowing how to manage personal finances is the cornerstone of being able to successfully build wealth. Accordingly, how to manage personal finances has never been as crucial a subject as it is right now! It has been four years since the start of the “Great Recession” and the ensuing jobless recovery. The housing market remains depressed while home foreclosures and short sales continue at a distressing rate.

How Are You Doing?

If you were a true member of the “wealthy class” in America at the time of economic tsunami and not overly burdened with debt or other forms of exposure to financial loss, you are probably still relatively comfortable and perhaps even profiting from the current economic situation.

If you and yours resided within any level of the “Great American Middle Class”, the odds are better than even that you’re experiencing some degree of financial hardship. The economy has taken a long-term change for the worse, presenting you with the challenge to survive and overcome.

The weak financial foundations of an alarming number of Americans were exposed by the meltdown of “08-09”. Too many individuals/households, some with excellent incomes, were living on the bubble while not employing sound principles on how to manage personal finances.

Those who were experiencing the most financial distress may have also suffered through bankruptcy and/or home foreclosure. Now, as we wrestle with the post collapse “New Economy”, what will it take for working class / middle class Americans to regain viable financial status and direction? What should we be doing now?

Seek Information About Managing Your Personal Finances

It is probably accurate to state that most adults are intuitively aware of timeless maxims such as, “do not live beyond your means” and “save for a rainy day”. The problem is that too many people simply don’t follow this advice. In the New Economy, Americans will have to seek information on how to manage personal finances and acquire the discipline to apply it. In addition to becoming better money managers, we must also find ways to earn more income in an environment of fewer jobs and stagnant salaries/wages

Some of the elements comprising the “weak financial foundations” mentioned above are:

  • Excessive materialism / impulsive buying
  • Lack of savings
  • Excessive use of “toxic” debt such as credit cards
  • Living from paycheck to paycheck
  • Not developing spending & savings plans based on budgeting finances
  • Depending on too few sources of income

Commit To Your Own Rescue

Focus on three areas.

  1. Address bad habits and commit to learning how to become much better at managing your personal finances at all levels. Intelligently manage your use of credit (especially credit cards) and learn to use budgeting finances as the basis for controlling spending and anchoring your overall long-range personal financial plan.
  2. Regardless of your background, education or experience, find ways to generate income from multiple sources. It can be done.
  3. Gain a working knowledge of how to invest, which, along with saving money will create wealth for your future and potentially that of your descendants. There are plenty of books, courses and online resources to help you. If you seek the services of a financial professional, make sure that they are certified and do not have a financial interest in any investment products that they may present to you.

How to Manage Money

When I was young I always found it interesting how much my dad understood money and personal finances. Even up to today when he is getting closer to his long awaited retirement, he understands a great deal more than nearly every individual that I have met. My dad is still planning and evaluating his portfolio, continually changing and always adjusting. He always makes regular contributions to his retirement plan and never misses or is late with paying his bills. He knows how to manage money.

A little bit of me thinks that my interest in proper money management stems from his keen interest for it. When I was a child I would continually ask questions about his past. I asked him how he knew when to change certain investments from medium risk to highest risk and vise versa. Before the stock crash in 1987 he completely avoided a loss by adjusting his his entire investment portfolio a 5 months before everything went downhill. He did so in early 2000 and again before this most recent crash. When thousands of people lost half of their savings and forced to sell their homes he managed to protect his entire portfolio and eliminate his mortgage in 15 years.

Is it a fluke that my dad has always avoided losing close to nothing during these difficult times? My dad isn’t an investment advisor or or work at a bank nor does he work as a stock broker. In fact his career for close to 4 decades was as a manager at a retail store. How has he always understood when he had to make changes and at the right time? He has either been visiting the only fortune teller that isn’t lying or he understands finances more than the average person. I think it’s the later.

My father’s financial interests started when he worked as a teller at a bank when he was a teenager. The job required him to read all about how to manage money so he could easily answer the questions his customers would have. He only worked there for about five years before he moved on to a different career. The things he learned in that limited period of time he ended up taking with him for the rest of his life. He made some mistakes along the way but due to his knowledge, he understood how to fix those misadventures and limit the damages.

Since the time that he switched careers over 40 years ago, I don’t think he has picked up a book on finances. Having said that I can say for sure that he read so much more in those five years than most people read in 20 years. The wonderful thing about personal finance basics is that they really don’t change. The simple formula’s involved with finances or principle or the dividends have remained the same for ages. The more reading you do the more you will know how to manage money.

Knowledge is the key to life. By reading as much as possible or even just a tiny bit you will better understand how to manage money. Just by spending a few short hours each week informing yourself with this blog and by picking up some excellent books you will understand the investment trends and will avoid the crippling losses. There aren’t too many things more important than making sure your finances are always in order. A little knowledge is a dangerous thing. The more you have the more you will save.

How to Manage Money

If you are similar to everyone else you probably feel as though you could make more money and don’t know what to do with the money you have. The mega wealthy know how to manage money and are able to manage the lifestyle we all dream of. Here are a few helpful ways that you can turn your finances around and help you to be far more wealthy than you imagined.

Better Time Management at Work

There are ways to be smarter with how you spend your time at your job. Many of us relish the ‘water cooler meetings’ but is it the best use of your time? Probably not. Instead of talking about the most recent episode of 24, learn to be an expert on a certain part of your job, figure out something new, or find a way that will cut costs. The more you put into your job the more you will get from it. Make yourself stand out as the perfect person for any promotion or salary increase. If you’re truly motivated enough you might even discover yourself in your bosses chair.

Negotiate Your Salary

When most people begin a new job they are usually too scared to negotiate their salary and take whatever is offered. Statistics show that those that negotiated how much they want to make increased their salary by almost eight percent versus the people who did not. What’s the worst case scenario? You might just get the big fat pay raise that you want and create new ways of how to manage money.

Be More Charitable

It’s amazing how well the ‘pay it forward’ mentality works for the rich. The average household with an income of over $500,000 gave away over 6% of what they make to charities or special causes. Not only does giving back to those who need it will supply you with a lot of satisfaction and you can write off donations come tax time. If you are really on top of your finances you may even be able to put yourself into a lower tax bracket.

Own Your Own Business

As the old saying goes ‘You can never get rich by working for someone else.’ It takes a lot of work, determination, headaches and sleepless nights to own your own business. On the other hand, the sense of accomplishment, excitement and financial rewards of having your own business are immense. Before you quit your job and start a franchise that sells chocolate covered bananas, do a lot of research and make a business that can sustain you and your family. The more {preplanning you do|you plan and discover how to manage money properly, the more successful you will be. The rich don’t become wealthy by chance.

Strategize Borrowed Money

The wealthy often borrow as much money or more than the average person but they way they borrow money is very different. The wealthiest people in the world are half as likely to have credit card debt and they are also less likely to have auto loans. Most of the wealthy carry mortgages much like the average person and they are three times more likely to have loans on real estate investments. The rich know how to manage money better than most people because they wisely borrow.

Buy Into Real Estate

Do you think Bill Gates or Donald Trump rent their homes? If you want to get ahead with your finances and stay ahead you must buy real estate. Don’t purchase outside of your budget. Try to buy something that you can afford and can even fix up and sell in a couple of years for a major profit. By renting, your money is being wasted. Chances are your mortgage payment will be as much or less than you are currently paying in rent.

It may take baby steps but if you want to get ahead with your money and follow these tips of how to manage money. The wealthy aren’t rich by fluke. They usually take calculated risks and are rewarded financially in the end. You have it in you to make the same kind of decisions and start making the money you’ve always dreamed.